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Unit 11: Multinational Performance Management

Role expectations are more complex for the TCN than the PCN, because the role is defined Notes
by and performed in two countries other than the TCN’s own.

Example: A U.S. manager working for a Dutch multinational posted as a TCN in Indonesia
may face added difficulties. The American’s role behaviour may be deemed in appropriate by
both the parent (Dutch multinational) and the host nationals (Indonesians). American manager
working in Indonesia as a PCN or TCN encounters the lack of job discretion with same effect in
terms of performance developing upon strength of other intervening variables. Differing role
sender may exacerbate the situation through conflicting role expectations.

3. Headquarters’ Support: The expatriate assignment differs from a domestic relocation
because it involves the transfer of the individual and accompanying family members into
a foreign environment, which is outside their normal, cultural comfort zones. The
individual’s primary motivation for accepting the assignment may be career or financially
oriented. The level of headquarters’ support provided to the individual and the family is
an important performance variable that involves more than the tangible, monetary support
contained in the compensation package.

Figure 11.6: Employment Contract

Transactional Relational
Specific, short-term, Broad, open-ended,
monetizable obligations long-term obligations
limited involvement of parties monetizable and
socio-emotional elements

Source: P. J. Dowling, International HRM. 2001 (p. 131)
The employment contract comprises two components – the transactional and the relational
– contained within a broader social contract. The social contract represents an implicit
contract to execute the employment according to a set of values, beliefs and norms. The
transactional contract comprises the specific, short-term, monetisable obligations and the
relational contract is characterised by broad, open-ended, long-term obligations based on
both exchanges around monetisable elements (example, pay for service) and socio-
emotional elements (example, loyalty and support).
The relational element of the employment contract is connected to the concept of the
psychological contract. The “beliefs that individuals hold regarding promises made,
accepted, and relied upon between themselves and another.” Violation of the psychological
contract occurs when an individual feels that the organisation has not fulfilled its obligations
in return for the efforts and contributions made by the individual. Perceived violation has
a negative effect on commitment and loyalty to the organisation. The way in which the
expatriate and their family are received and supported by subsidiary is also important.
Therefore, it may be concluded that headquarters support in the foreign location is a more
powerful explanatory variable in expatriate performance than is generally recognised.

4. Host Environment: The international context – with its differing societal, legal, economic,
technical, and physical demands – can be a major determinant of expatriate performance.
So, expatriate performance should be placed within its international as well as its

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